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OUTER HOUSE, COURT OF SESSION
[2007] CSOH 64
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OPINION OF LORD
TURNBULL
in the cause
BRIAN and JEAN GRAY
Pursuers;
against
WILLIAM WELSH
Defender:
ญญญญญญญญญญญญญญญญญ________________
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Pursuers: Richardson; Pinsent Masons
Defender: McIlvride; Gillespie MacAndrew
23 March 2007
Introduction
[1] In
2004 the defender was the owner of a housing development at an area known as Holmwood Park, Crossford, Lanarkshire. The development is situated at the confluence
of the River Nethan and the River Clyde.
[2] The
pursuers, who are married, entered into an agreement for the purchase of a plot
and house at the development. At the
time of the agreement the house had not been constructed. Their agreement was for the purchase of what
was referred to in plans produced by the defender as Plot 9. In due course the pursuers took occupation of
the house as constructed, with the address 5 Holmwood Park.
The pursuers' plot is bounded to the north by the River Clyde. In the present action the pursuers claim
damages in consequence of certain defects which they allege are present in the
formation of their garden ground resulting in erosion and collapse into the
adjoining river. Their claim is said to
arise out of breach of contract and delict.
The case called before me on the defender's first plea-in-law to the
effect that the pursuers' averments were irrelevant and lacking in specification
to the extent that the action fell to be dismissed.
The
Pursuers' Case
[3] The
pursuers' case as pled on record can be summarised as follows. In article 2 of condescendence the
pursuers aver that they entered into Missives with the defender by letters
dated 16 and 21 April and 6 May 2004.
They also aver that prior to the conclusion of Missives they had various
discussions with a Mr Tony Munsey.
It is averred that these discussions included certain variations to
parts of the house and garden, including the layout of the garden to be
constructed on the plot. It is averred
that these variations were agreed to by Mr Munsey on 18 March 2004 by his signature on a letter from the
pursuers of that date. The pursuers aver
that the defender acted and allowed Mr Munsey to act in such a manner that it
was reasonable for them to infer that the defenders had authorised Mr Munsey to
act for him in these matters. In these
circumstances the pursuers claim that the variations discussed with Mr Munsey
became part of the agreement entered into between themselves and the defender.
[4] In
article 3 of condescendence the pursuers aver that there was implied into the
Missives a term to the effect that the dwelling house and any garden ground
pertaining thereto would be built to reasonable workmanlike standards and free
from such defects as would render it as unsafe or unsuitable for occupation as
a domestic dwelling.
[5] In
article 4 of condescendence the pursuers aver that the garden of their property
and the gardens of the neighbouring properties at numbers 11, 9 and 7 Holmwood
Park ("the Neighbouring Properties") were formed by the defenders from made
ground to a depth which is given. This
combined area is referred to thereafter as the "Made Ground". The pursuers aver that the Made Ground is
defective.
[6] In
article 5 of condescendence the pursuers aver that in about October of 2004 the
Made Ground slumped down towards the River Clyde and that in about January 2005
it was further disturbed and subject to movement. They also make further averments concerning
the content of the Made Ground and its stability.
[7] In
the following articles of condescendence the pursuers make various averments
concerning expert reports instructed by themselves and their neighbours and
various remedial works carried out at certain locations by the defender. In article 8 they set out they way in
which they say the defender has acted in breach of the Missives and in breach
of duty. In article 9 they set out the
quantification of their claim.
The
Defender's Response
[8] The
defender's response as pled can be summarised as follows. The defender admits that he was the owner of
the plot and that he had no direct contact with the pursuers prior to
conclusion of the Missives. He explains
that Mr Munsey is a director of Welsh Munsey (Developments) Limited ("WMD"),
and that he contracted with that company for the construction of the pursuers'
house and the formation of garden ground between the house and the river. He explains that the sales and marketing for
the site was carried out by WMD and that literature and site signs made it
clear that WMD were carrying out the development. The defender avers that Mr Munsey acted
as a director of WMD and not on his behalf.
He avers that the Missives contain no obligation upon him to form garden
ground and that any work to the garden ground was carried out by WMD.
[9] The
defender goes on to accept that the gardens of some neighbouring properties to
that of the pursuers were subject to movement in October 2004 and that certain
remedial works to such properties were carried out. He further avers that the pursuers have
suffered no loss.
The
Defender's Submissions
[10] Mr
McIlvride, who appeared for the defender, moved me to sustain his first plea-in-law. He presented three submissions in support of
his motion:
i. That the pursuers had failed
relevantly to aver either a breach of duty, contractual or delictual, or any
damage actually resulting from any such breach of duty.
ii. That in any event the pursuers
averments to the effect that the defender contracted to erect or build a garden
were irrelevant and the pursuers' contractual case ought to excluded from
probation.
iii. That in any event the pursuers'
averments to the effect that Mr Munsey acted as the defender's agent were
irrelevant and ought to be excluded from probation.
[11] In
seeking to advance his first submission Mr McIlvride sought to emphasise that a
pursuer is obliged to aver the full facts which result in the establishment of
his case. In doing so he sought to
identify the limited set of circumstances in which an averment as to a state of
mind or belief might be relevant and to contrast those circumstances with the
present pleadings. By way of example he
drew my attention to the limited application of the formula "believed and
averred" as explained in Brown v Redpath Brown & Company Limited
1963 SLT 219.
[12] Accordingly,
he submitted, it was not sufficient for the present pursuers to narrate their
own or anyone else's opinion on essential aspects of their case. It was necessary to aver a state of facts
which they offered to prove. With this
introduction Mr McIlivride then took me to various averments within articles 4,
5, 6, 7 and 8 of condescendence which he submitted were defective.
[13] In
article 4 he referred me to the averment that:
"The Made Ground
had not been formed from materials selected and compacted in accordance with
conventional engineering specifications.
Accordingly the Made Ground is defective."
He submitted that there was no averment
as to what conventional specifications were or in what way the composition
deviated from the norm. He submitted
that there was no notice of what the pursuers were seeking to prove.
[14] In
article 5 Mr McIlvride referred me to the following four passages which he
subjected to criticism:
i. "In about October 2004 the gardens of
the Neighbouring Properties was (sic) disturbed and subject to movement. The Made Ground slumped down towards the
River Clyde."
This averment he said related to
properties other than the pursuers and there was no specification of the extent
to which the Made Ground was said to have slumped.
ii. "In or about January 2005, following a
period of high rainfall, the Made Ground was further disturbed and subject to
movement. A significant tension crack,
running parallel with the River Clyde was formed in the garden of number 7 Holmwood Park.
Said tension crack had the bowl shape of a circular arc failure."
Again he submitted that there was no
specification as to which part of the Made Ground was further disturbed and
asked whether it was the garden of number 7 as that was where the crack was
said to have been located.
iii. "A number of transverse 150mm diameter
plastic drainage pipes leading to the River Clyde were disturbed by the ground
movement."
Again he pointed out that there was no
specification as to where in the Made Ground these pipes were disturbed. He submitted that in relation to each of
these averments it was to be noted that the pursuers were not offering to prove
that these events were occurring in their garden.
iv. "The stability of the Made Ground is
dependant upon ground water influences and on the uniformity of the engineering
properties of the soils. The soils which
form the Made Ground are predominately granular or have a high granular
content. Said soils encourage the rapid
permeation of ground water when the water level in the River Clyde is
high. Accordingly the Made Ground is
susceptible to river level fluctuations and other ground water influences. When the water level in the River Clyde drops
rapidly and there is a slower fall in the level of ground water, the Made
Ground becomes unstable."
Here Mr McIlvride explained that the
defender's complaint was that the pursuers were not averring what other
materials could or should have been used, what materials the reasonably
competent builder would have used or in what way the composition deviated from
normal standards.
[15] In
article 6 of condescendence Mr McIlvride referred me to the averments relating
to the instruction of a firm of Consulting Engineers, W A Fairhurst and
Partners and to their report dated February 2005. He pointed out that what one finds in this
article of condescendence is an expression of the various views which that firm
arrived at concerning the Made Ground, rather than averments as to matters of
fact relating to the Made Ground.
[16] In
article 7 of condescendence there are averments relating to a second report
commissioned from the same firm in August 2005. This second report dealt specifically with the
condition of the pursuers' garden. Again
Mr McIlvride drew my attention to the fact that the averments refer to the
opinions and conclusions of the firm concerned.
Within this article there are also averments relating to remedial work
carried out by the defender at the garden of number 11 Holmwood Green. Mr McIlvride submitted that this
appeared to be a different part of the development and submitted that it was not
averred that this garden fell within the Made Ground. He explained that although the defender had
carried out remedial work at various properties this was not an admission of
the presence of a defect of the sort pled by the pursuers.
[17] Article
8 of condescendence contains the pursuers' averments of fault. They aver that the defender acted in breach
of the terms of the Missives and in breach of a duty to build the House and
Garden to reasonable workmanlike standards.
Mr McIlvride drew attention to the following averment:
"The defender has
failed to ensure that the Garden is not (sic) free from such defects as would
render it unsafe or unsuitable for occupation as a domestic dwelling. A contractor building to reasonable and
workmanlike standards would have formed the Made Ground from materials selected
and compacted in accordance with conventional engineering specifications. The garden had not been formed from materials
selected and compacted in accordance with conventional engineering
specifications."
Mr McIlvride's contention was that here again no assertion is made as to what the
conventional engineering specification is and no notice is given by the
pursuers as to the way in which they say the defender has failed to comply with
the applicable standard.
[18] The
consequence of these submissions according to the defender's argument was that
the specified averments in articles 4, 5, 6, 7 and 8 fell to be deleted as
irrelevant. In any event he suggested
they were insufficiently specific to give the defender fair notice of the
pursuers' case and on that basis ought also to be deleted. Mr McIlvride submitted that if I was with him
on either of these arguments the outcome would be that the pursuers' case would
be dismissed as there would remain no relevant or specific averments of breach
of duty or of loss sustained.
[19] The
defender's second major submission was that the pursuers had failed to aver a
relevant case to the effect that he had contracted to erect or build a
garden. In presenting this argument Mr
McIlvride focused on the terms of articles 2 and 3 of condescendence. His argument was that the Missives comprised
the letters of 16 April 2004, 21 April and 6 May, numbers 6/1, 6/2
and 6/3 of process. Of these documents
only the letter of 16 April had any applicable content. It comprised a letter from the pursuers'
solicitors which had attached to it a pro
forma offer document prepared by the defender. This was a typed document for use by
customers intending to purchase any of the properties on his development. It included blank spaces into which details
such as the house type and price were to be entered.
[20] Mr
McIlvride referred me to Taylor
v Secretary of State for Scotland 2000 SC (HL) 139 and Aberdeen Development Co. v Mackie, Ramsay & Taylor 1977 SLT
177 and submitted that in construing these documents the applicable legal
propositions were these:
1. In construing a particular provision in
a set of missives it is necessary to do so in light of the contract as a whole
2. As a general principle the seller of
heritage gives no warranty as to its condition
Mr McIlvride's contention was that viewed
in light of these propositions the Missives provided only for the sale of Plot
9 with the additional specified obligation of the construction of a dwelling
house of the type mentioned. Since any
further obligation to be incurred by the seller would have to be positively
undertaken it was clear, he said, that there had been no agreement to erect or
build a garden. In these circumstances
he submitted that article 3 in its entirety and the references to breach of
contract in articles 8, 9 and 10 fell to be deleted, with the result that the
pursuers' contractual case was removed in its entirety.
[21] The
defender's third major submission related to the averments in article 2 of
condescendence as to the discussions between the pursuers and Mr Munsey. Mr McIlvride submitted that the
pursuers' case here was one of ostensible agency. He submitted that the averments in article 2
were insufficient to establish this. His
contention was that there would require to be a representation by the principle
which the third party was entitled to rely on.
He referred me to the opinion of Lord Reed in Ben Cleuch Estates Limited v
Scottish Enterprise [2006] CSOH 35 and to what his Lordship said at
paragraph 127 of his opinion.
[22] Mr
McIlvride submitted that looking to the averments within article 2 the pursuers
were not offering to prove anything which amounted to a representation by the
defender nor anything which would justify a belief that Mr Munsey acted with
the defender's authority. Accordingly
the relevant passages within this article ought to be excluded.
Pursuers'
Submissions
[23] Mr
Richardson, who appeared for the pursuers, submitted that their case arose out
of the purchase by the pursuers of a house and garden at Holmwood Park and proceeded upon the basis that the
Missives entered into between the pursuers and the defender, as properly
construed, bound the defender to construct a house and garden. He further submitted that it was an implied term
of this agreement that this work would be carried out to a reasonable
workmanlike standard. The pursuers, he
said, were offering to prove that the defender did carry out the formation of
the garden ground at their plot as part of the Made Ground. In doing so they say he failed to comply with
the implied term of their agreement and was in breach of a duty of care owed to
the pursuers. Although he was prepared
to recognise that certain issues of relevancy might arise Mr Richardson
submitted that any such issue could only be addressed after hearing evidence
and he moved me to permit a proof before answer.
[24] Mr
Richardson responded to each of the defender's submissions in turn. In relation to the first, he submitted that
in article 3 of condescendence the pursuers had set out the implied term which
they relied upon. He pointed out that
the defender did not seek to suggest that such a term could not be
implied. He submitted that within
article 4 of condescendence one finds a summary of the pursuers' case. There it is explained that the defender
proceeded to construct the House and form the Garden, that the Garden was
formed as part of what is defined as the Made Ground and that the Made Ground
was defective. He submitted that these
were all positive averments of fact, not of opinion. It followed from this that it was incorrect
to contend that the pursuers relied upon the conclusions of the Consulting
Engineers report to plead a relevant case.
[25] Similarly,
he submitted that in article 5 one finds averments of fact regarding the
movement of the Made Ground, the composition of the Made Ground and its
susceptibility to river level fluctuations.
In article 7 he submitted one finds the critical averment of fact that:
"Unless
remedial steps are taken, the Made Ground will deteriorate with continuing
random collapses of the Garden and the Garden will progressively erode."
[26] All
of these averments of fact, he submitted, were linked to the averments of duty
set out in article 8 and the averments of loss as set out in article 9 of
condescendence. In relation to article 8
no suggestion was made that the duty of care pled ought not to be imposed. On this basis Mr Richardson submitted that
the pursuers had pled a relevant case and the action ought not to be dismissed.
[27] Mr
Richardson went on to submit that there were in any event two further reasons
why the averments relating to the Consulting Engineers' Reports and their
conclusions ought not to be excluded.
Firstly, he argued that these averments had to be seen in light of the
positive averments of fact to which they related. He pointed out that the pursuers averred that
after disclosure of the February 2005 report the defender instructed various
remedial work to the Neighbouring Properties and that he consulted W A
Fairhurst and Partners both prior to and during the carrying out of this
remedial work. Accordingly, these were
averments in which the pursuers established the basis upon which the opinion of
W A Fairhurst and Partners was one of relevance and acted upon by the
defender. Secondly, Mr Richardson argued
it was relevant to aver that the pursuers had consulted this firm and that they
had certain conclusions in order to establish that the pursuers were acting
reasonably.
[28] In
these circumstances Mr Richardson submitted that the averments made on the
pursuers' behalf were, according to their primary meaning, sufficient to
support the conclusions sought. This was
sufficient to pass the test of relevancy on the authority of Hope v Hope's Trustees (1898) 1 Fraser (HL) 1.
[29] In
relation to specification he argued that it was perfectly clear to the defender
what the pursuers' case was. He
submitted that in articles 4, 5 and 7 there are definitions of both the Made
Ground and the Neighbouring Properties. The pursuers' garden is accordingly
seen to be part of the Made Ground.
Within these articles of condescendence he submitted one sees that the
composition of the Made Ground is specified, the complaint made about it is set
out and an explanation is given of what happened to it and when. In addition,
an explanation of what will occur if the defect is not remedied is
averred. The question of what
constituted conventional engineering specifications was, he submitted, a matter
to be established at proof. Furthermore, he submitted, in article 6 the
pursuers have made it clear what is necessary by referring to and describing
the work which the defender carried out at the Neighbouring Properties, as
guided by the February report from W A Fairhurst and Partners.
[30] In
addressing the defender's second major submission Mr Richardson's position was
that the matter of whether the defender had contracted to build a garden could
not be resolved as a matter of relevancy as there was a dispute on the facts as
to the terms of the missives. The
pursuers' case as pled was that the variation agreed to by the letter of 18
March 2004
became part of the contract entered into by the defender. He pointed out that the pro forma document attached to the letter of 16 April
specifically contemplated such a variation.
He referred to the first paragraph of the document which was in the
following terms:
"I/We hereby
offer to purchase from you Plot 9 on your Estate Plan at Holmwood Park,
Crossford, Lanarkshire, which plan is demonstrative only and not taxative and
may be varied by you as circumstances require together with the dwelling house
Type Keble to be erected by you thereon with any garden ground and all rights
common, mutual or otherwise pertaining thereto at the price of Three Hundred
and Forty Five Thousand Pounds (ฃ345,000) with, in addition, the cost of any
additions or variations ordered by me/us in writing and that on the following
terms and conditions."
[31] Mr
Richardson submitted that not only was the variation the subject of clear
averment, but the pursuers further offered to prove that the work, as agreed,
was carried out. He submitted that the
pursuers were entitled to rely on an implied term that the work so carried out
would be to the required standard.
[32] In
response to the third of the defender's major submissions Mr Richardson's reply
was that the pursuers averred a number of facts which, when taken together,
established sufficient by way of representation on the part of the defender. These were, the formal conclusion of Missives
by the defender, the fact that WMD were carrying out the sales and marketing
for the site, the fact that Mr Munsey agreed to the variations set out in the
letter of 18 August and the fact that the work as agreed was carried out.
Discussion
[33] I
was satisfied that Mr Richardson was correct in saying that within articles 4,
5 and 7 one found statements of fact which the pursuers offered to prove and
which are, according to their primary meaning, sufficient to support the
conclusions sought. The pursuers do not
plead the essential basis of their case by way of reference to opinion. The references to the report prepared by W A
Fairhurst and Partners are in my opinion relevant for the purposes referred to
by Mr Richardson. Accordingly on these
matters, with one qualification to which I will return, I rejected the
submission advanced by the defender.
[34] I
also rejected the submission that there was insufficient specification of the
pursuers' case to give the defender fair notice of what was being claimed. The submissions made by Mr Richardson, as
summarised in paragraph 29 above, make it clear that the pursuers give adequate
by way of fair notice. The argument
advanced on behalf of the defender has a degree of artificiality about it,
especially when regard is had to the surrounding circumstances. The defender has had disclosed to him both of
the reports commissioned from W A Fairhurst and Partners. Article 6 of condescendence contains detailed
averments as to the work which the defender instructed to the Neighbouring
Properties following disclosure of the first report. Answer 6 on his behalf is in the briefest of
terms and I can only read it as an admission that the work specified was
carried out at his instruction. Further
Mr Richardson drew my attention to particular averments in answer 4. These it was explained appeared to relate to
a claim which the defender had at one stage been advancing against WMD as third
parties.
The averments were in the following terms:
"The defender
contracted with (WMD) for inter alia the construction of the House and the
formation of garden ground between the House and the river. The formation of the said garden ground was
to be carried out by infilling with upfill material to form level garden
ground. The garden ground thereby formed
was adjacent to the River Clyde. It
required to be sufficiently specified and constructed not to be vulnerable to
land slippage."
There seemed to me to be force in Mr
Richardson's comment that despite the range of complaints which had been
directed towards the specification of the case pled by the pursuers, the
defender had been able to identify the complaint adequately for his own
purposes.
[35] The
defender's second major submission was that the pursuers had failed to aver a
relevant case to the effect that he had contracted to erect or build a
garden.
In my opinion it is not possible to
resolve this issue as a matter of relevancy.
As I understood it the pro forma
document was provided by the defender.
It does refer to garden ground.
There may well be room for differing views as to its proper
construction. What is clear however is
that the document expressly acknowledges that additional or different
obligations can be constituted by ordering in writing. The pursuers' contention is that they did
so. The pro forma document does not restrict any such additions or
variations to those ordered after the date of the offer. Indeed it might seem only prudent for a house
purchaser with nothing more than a plan to work from to discuss and arrange his
detailed needs in advance of formalising his financial commitment. In my judgement this whole issue is
interlinked with the question of Mr Munsey's role and is dependant upon
the evidence which may be led about the whole circumstances, including what
work was carried out. For these reasons
I rejected the defender's second submission.
[36] The
question of any ostensible agency held by Mr Munsey arises from the averments
made in articles 2 and 3 of condescendence.
It may be capable of illumination by looking to the reality of the
circumstances as discussed before me. In
the first place it came as no surprise to hear from Mr McIlvride that the
"Welsh" of Welsh Munsey (Developments) Limited is the defender and that he and
Mr Munsey are co-directors of that company. The defender's position as pled appears to be
that he instructed WMD to carry out the construction work at the development on
his behalf. In this context it seemed to
me that when one examined the content of answer 2 for the defender:
"Not known and
not admitted that the pursuers has (sic) conversations with Mr Munsey, nor
the content thereof."
one had to look at this in quite a
strained and artificial way to see it as full and frank pleading. This view is further fortified by seeing that
the defender appears to feel able to give certain explanations in answer 7 as
to what WMD did and why.
[37] Furthermore
the defender's contention as pled in answer 2 is that WMD carried out the sales
and marketing for the site. He avers it
was clear that WMD were "carrying out the development". In the sense that WMD performed the work of
construction they may have been carrying out the development. However, the defender was the owner of the
various plots which formed the development.
He appears to have provided the plans showing the relevant plots on
it. He provided the pro forma documentation regarding the purchase. It was with him that the pursuers contracted
and it was he who undertook the obligations within the missives, including that
of erecting a type "Keble" dwelling house.
Accordingly, he appears to be properly regarded as the developer. How he arranged for the actual construction
of the dwelling houses was a matter for him.
If, as admitted, the defender had no contact with the pursuers prior to
conclusion of missives how one might wonder did he go about the task of
discussing with prospective purchasers what their requirements, as to for
example house type, might be. The answer
to this, even on his own pleadings, would seem to be that he did so through the
medium of an agent. His contention is
that WMD carried out the sales and marketing for the site and that this was
made clear on literature and signs available on site. The only sense in which they could have done
so was as agents for the owner and developer.
[38] Accordingly
it seems clear to me that there was a representation by the defender which the
pursuers were entitled to rely on. The
representation was that WMD were acting as his agents in the sales and
marketing of the plots which he was offering to sell and the properties which
he was offering to construct thereon.
For these reasons I rejected the defender's third submission.
[39] Within
article 7 of condescendence there are averments referring to a collapse in the
garden of number 11 Holmwood Green which is said to have occurred on or around
12 June 2006. Although perhaps quite
near to the pursuers' property, this is within a different part of the
development. It falls outwith the
definition of the Neighbouring Properties and outwith the definition of the
Made Ground. Accordingly I recognised
that there was force in Mr McIlvride's submission that there was no link to
explain how any damage to this garden could be relevant to the composition of
the Made Ground and the averments as to the unsuitability of the Made
Ground. For this reason I will refuse to
allow the averments relating to this property to be admitted to probation. That apart, I will refuse Mr McIlvride's
motion. I will instead grant
Mr Richardson's motion and allow parties a proof before answer.
